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SERVICE QUALITY:Moments of Truth, Perceived Service Quality, Service Gap Analysis

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Production and Operations Management ­MGT613
VU
Lesson 24
SERVICE QUALITY
Learning Objectives
After completing this lecture the students should be able to describe the five dimensions of service
quality in detail. This would enable them to use the service quality gap model to diagnose quality
problems also understand the quality service by design concepts. This lecture would provide the
students with an opportunity to learn and illustrate how Taguchi methods and poka-yoke methods are
applied to quality design. The students should be able to at least gain awareness how organizations
perform service quality function deployment in order to improve their operations side. The students
should also be able to construct a statistical process control chart.
Moments of Truth
Each customer contact (between the service provider and customer) is called a moment of truth.
An organization has the ability to either satisfy or dissatisfy them when you contact them.
A service recovery is satisfying a previously dissatisfied customer and making them a loyal
customer.
Dimensions of Service Quality
Dimensions for Service Quality are more or less the same which we associate with the concept of
Quality in General. Also, we as service demanders (customers) are well aware of the fact that we always
seek reliability, agility (prompt responsiveness), assurance, tangibility and empathy while being
provided with a service. More or less these dimensions help the customer to rate and distinguish one
service provider from another. A good service from a bad service. Often organizations use a
performance measure matrix using the same service dimensions and they often call it RATE based on
the 5 dimensions described below.
1.
Reliability: Perform promised service dependably and accurately.
2.
Responsiveness: Willingness to help customers promptly.
3.
Assurance: Ability to convey trust and confidence.
4.
Tangibles: Physical facilities and facilitating goods.
5.
Empathy: Ability to be approachable.
Normally in such situations, R represents Reliability and Responsiveness, A represent Assurance, T
represents Tangibles and E represents Empathy respectively.
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Production and Operations Management ­MGT613
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Perceived Service Quality
It is often seen that a customers required service is not provided by the service provider primarily
because of a gap between Service Quality Dimensions and Service Quality Assessment by the customer.
Word of
Personal
Past
mouth
needs
experience
Service Quality
Service Quality Assessment
Expected
Dimensions
1. Expectations exceeded
service
Reliability
ES<PS (Quality surprise)
Responsiveness
2. Expectations met
Assurance
ES~PS (Satisfactory quality)
Perceived
Empathy
3. Expectations not met
service
Tangibles
ES>PS (Unacceptable
quality)
Service Quality Gap Model
We can pictorially capture the gaps that exist between service provided and the service demanded
Customer
Customer
Customer Satisfaction
GAP 5
Perceptions
Expectations
Understanding
Managing the
Customer /
the Customer
Evidence
Marketing Research
Communication
GAP 1
GAP 4
Management
Service
Perceptions
Delivery
of Customer
Expectations
Conformance
Design GAP 2
GAP 3
Conformance
Service Design
Service
Standards
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Production and Operations Management ­MGT613
VU
Service Gap Analysis
A good example where gap analysis is used for improvements in business is in the services
field
The most popular assessment tool used in service quality is called SERVQUAL, which
involves a set of the 5 most important dimensions of quality according to rankings of
customers
Also involves a set of 5 gaps which represent the difference between customers'
expectations and perceptions or in other words the difference between expected level of
service vs. Actual level of service provided
SERVQUAL (Stands for SERVICEQUALITY).
SERVQUAL Model Gaps
Let's try to capture all 5 gaps; one by one this would help us to understand in detail the 5 dimensions of
service quality.
Gap 1
The difference between actual customer expectations and management's idea or perception of customer
expectations.
Managers and employees have a very internal process-oriented view of their business, it is tough to
break this view and to see things the way the customer does
This gap of the SERVQUAL Model can help management with customer service
Gap 2
Mismatch between manager's expectations of service quality and service quality specifications
To implement a system to improve this gap, management must first understand exactly what the
customer wants
If this understanding is not present, it will be impossible for management to know whether their
expectations are aligned with customer specifications.
Gap 3
Poor delivery of service quality
Once the specifications from gap 2 are aligned the next step is to deliver these services in a perfect
manner
Quality of delivery must be perfected during the interaction with the customer
The employees that are responsible for these actions are referred to as contact personnel
Some reasons for a lack of quality include poor training, communication, and preparation.
Gap 4
Differences between service delivery and external communication with customer
Customers are influenced by what they hear and see about a company's service
Word-of-mouth publicity and advertising are main outlets which customers open their
opinions to
The difference between what a customer hears about a company's service and what is
actually delivered is represented by gap 4
This gap can lead to dangerously negative customer perceptions
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Production and Operations Management ­MGT613
VU
Gap 5
Differences between Expected and Perceived Quality
This gap is directly related to everyone's perception of service quality
Customers expect certain things from certain companies
When someone goes into a McDonalds to order their favorite meal ­ a Big Mac, they are
expecting exactly what they are accustomed to getting (a quick, no hassle, tasty big burger
with all the works). If it takes 15 minutes to get a Big Mac that doesn't even have the
famous special sauce on it the customer's perceived service of McDonalds is going to
plummet.
If gaps 1 through 4 are closed to a minimum then gap 5 should follow, if there are any gaps
left in steps 1 through 4 the perceived customer service quality will be negatively affected
The way to make sure these gaps are closed is through thorough systems design, precise
communication with customers, and a well-trained workforce.
Quality Service by Design
We had discussed earlier, that design of a product or service half ensures a good productive system and
we did mention about Quality indirectly. We now take a direct approach and identify the ways in which
we can incorporate and identify Quality in the Design of Services.
1. Quality in the Service Package :Quality based service should be offered at same price, club class
passengers in an airline though being provided additional luxury are not able to bring enough
revenue. An airline that does not add quality would loose out to its competitors.
2. Taguchi Methods (Robustness): Relate to the quality based methods being able to deliver under all
possible environments. If a company is unable to offer an after sales service to a customer at any
particular place in the same country, it would simply lose out to its competitors.
3. Poka-Yoke: Poka Yoke (pronounced POH-kah YOH-kay) is the Japanese word for mistake proof.
In services, a simple mistake can have dire consequences, think of a hair dresser or stylist giving
you a wrong haircut. His mistake cannot be rectified because service again is an entity which is
based  on  transaction  between  the  service  provider  and  service  receiver.  These
devices/strategies/mechanisms/methods are used either to prevent the special causes that result in
defects, or to inexpensively inspect each item that is produced to determine whether it is acceptable
or defective.
4. Quality Function Deployment: is also known as QFD or House of Quality. It is an important tool of
Quality Management and allows a company not only to benchmark itself with industry leader but
also to review its internal operations critically.
The thing to remember here is that Quality in design ensures the safe as well as reliable operations of
the service. Consider for example the simple case of an oil change or a hair cut. If the service provider is
unable to include Quality in service, or fails to provide a consistent service under all conditions or fails
to do justice to idea of mistake proof service or is unable to deploy Quality Function in his service, he or
she would lose customers and competitive advantage along with loss in revenues and increase in costs.
Classification of Service Failures with Poka-Yoke Opportunities
Server Errors
Customer Errors
Task: Doing work incorrectly
Preparation:  Failure  to  bring  necessary
materials
Treatment: Failure to listen to customer
Encounter: Failure to follow system flow
Tangible: Failure to wear clean uniform
Resolution: Failure to signal service failure
House of Quality
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Production and Operations Management ­MGT613
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QFD can strongly help an organization focus on the critical characteristics of a new or existing product
or service from the separate viewpoints of the customer market segments, company, or technology-
development needs.
R e l a t io n s h i p s
*
S t ro n g
M e d iu m
O
W eak
O
O
*
*
C u s t o m e r P e rc e p t io n s
S e r vic e E le m e n t s
o
V illa g e V o l v o
Im
po
+
rt a
V o l vo
D e a le r
nc
e
C u s t o m e r E x p e c t a t io n s
1
2
3
4
5
+
R e lia b ilit y
o
9
8
5
5
+
o
9
R es p o ns iven e s s
3
3
2
7
+
A s s u ra n c e
o
9
6
5
6
+
o
7
4
E m p a th y
+
o
2
2
3
T a n g i b le s
+
o
o
C o m p a ris o n
w it h V o l v o D e a le r
o
o
o
_
W e ig h t e d s c o re
82
63
102
65
127
Im p r o v e m e n t d i ffi c u l t y r a n k
1
3
2
4
5
Achieving Service Quality: Service Quality can be achieved by making use of the following strategies
Cost of Quality
Service Process Control
Statistical Process Control
Unconditional Service Guarantee
We will discuss all four in detail during our discussions in lectures that follow this lecture for the time
being we can reiterate the fact that quality is offered free of cost. Also, as prevention is better than cure,
it makes a lot more sense to incur cost in prevention of defects instead of allowing the defects to occur
and then rectifying them. Statistical Process Control is one important tool to ensure that Service Quality
is achieved before a defect is introduced in the service being offered or product being manufactured.
Costs of Service Quality (Bank Example)
This example shows how a weak design service can incur loss in customer service, which leads to loss
in revenues. With this example we also try to focus our attention on the concept of cost in quality
dimension. We try to capture the importance of prevention costs and how they are more beneficial to the
organization as compared to detection and failure costs. As a rule of thumb it is said that prevention
costs are half the detection costs and about 12 to 16% of failure costs, but these percentages often fail to
represent, the cost expenditures in all types of services.
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Production and Operations Management ­MGT613
VU
Failure costs
Detection costs
Prevention
costs
External failure:
Loss of future
Process control
Quality planning
business
Negative
Peer review
Training program
word-of-mouth
Liability
Supervision
Quality audits
insurance
Legal
Customer
Data acquisition
judgments
comment card
and analysis
Interest
Inspection
Recruitment and
penalties
selection
Supplier
evaluation
Internal failure:
Scrapped
forms
Rework
Recovery:
Expedite
disruption
Labor and
Control Chart of Departure Delays
We talked about the concept of Service quality and one of its dimensions was Tangibility. We can apply
this dimension to the service provided by airlines operating in Pakistan. If we happen to visit any airport
in the northern part of Pakistan during winters especially during the months of December and January,
we face a situation where often there is a delay in the flight arrival and departure. We can make good
use of statistics to improve our service quality. In the graph below we have been able to identify a
Lower Control Limit and an Upper Control Limit.
expecte
100
Lower Control
90
80
70
199
60
p(1 - p
p(1 - p
LCL = p - 3
UCL = p + 3
n
n
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Table of Contents:
  1. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT
  2. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Decision Making
  3. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Strategy
  4. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Service Delivery System
  5. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Productivity
  6. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:The Decision Process
  7. INTRODUCTION TO PRODUCTION AND OPERATIONS MANAGEMENT:Demand Management
  8. Roadmap to the Lecture:Fundamental Types of Forecasts, Finer Classification of Forecasts
  9. Time Series Forecasts:Techniques for Averaging, Simple Moving Average Solution
  10. The formula for the moving average is:Exponential Smoothing Model, Common Nonlinear Trends
  11. The formula for the moving average is:Major factors in design strategy
  12. The formula for the moving average is:Standardization, Mass Customization
  13. The formula for the moving average is:DESIGN STRATEGIES
  14. The formula for the moving average is:Measuring Reliability, AVAILABILITY
  15. The formula for the moving average is:Learning Objectives, Capacity Planning
  16. The formula for the moving average is:Efficiency and Utilization, Evaluating Alternatives
  17. The formula for the moving average is:Evaluating Alternatives, Financial Analysis
  18. PROCESS SELECTION:Types of Operation, Intermittent Processing
  19. PROCESS SELECTION:Basic Layout Types, Advantages of Product Layout
  20. PROCESS SELECTION:Cellular Layouts, Facilities Layouts, Importance of Layout Decisions
  21. DESIGN OF WORK SYSTEMS:Job Design, Specialization, Methods Analysis
  22. LOCATION PLANNING AND ANALYSIS:MANAGING GLOBAL OPERATIONS, Regional Factors
  23. MANAGEMENT OF QUALITY:Dimensions of Quality, Examples of Service Quality
  24. SERVICE QUALITY:Moments of Truth, Perceived Service Quality, Service Gap Analysis
  25. TOTAL QUALITY MANAGEMENT:Determinants of Quality, Responsibility for Quality
  26. TQM QUALITY:Six Sigma Team, PROCESS IMPROVEMENT
  27. QUALITY CONTROL & QUALITY ASSURANCE:INSPECTION, Control Chart
  28. ACCEPTANCE SAMPLING:CHOOSING A PLAN, CONSUMER’S AND PRODUCER’S RISK
  29. AGGREGATE PLANNING:Demand and Capacity Options
  30. AGGREGATE PLANNING:Aggregate Planning Relationships, Master Scheduling
  31. INVENTORY MANAGEMENT:Objective of Inventory Control, Inventory Counting Systems
  32. INVENTORY MANAGEMENT:ABC Classification System, Cycle Counting
  33. INVENTORY MANAGEMENT:Economic Production Quantity Assumptions
  34. INVENTORY MANAGEMENT:Independent and Dependent Demand
  35. INVENTORY MANAGEMENT:Capacity Planning, Manufacturing Resource Planning
  36. JUST IN TIME PRODUCTION SYSTEMS:Organizational and Operational Strategies
  37. JUST IN TIME PRODUCTION SYSTEMS:Operational Benefits, Kanban Formula
  38. JUST IN TIME PRODUCTION SYSTEMS:Secondary Goals, Tiered Supplier Network
  39. SUPPLY CHAIN MANAGEMENT:Logistics, Distribution Requirements Planning
  40. SUPPLY CHAIN MANAGEMENT:Supply Chain Benefits and Drawbacks
  41. SCHEDULING:High-Volume Systems, Load Chart, Hungarian Method
  42. SEQUENCING:Assumptions to Priority Rules, Scheduling Service Operations
  43. PROJECT MANAGEMENT:Project Life Cycle, Work Breakdown Structure
  44. PROJECT MANAGEMENT:Computing Algorithm, Project Crashing, Risk Management
  45. Waiting Lines:Queuing Analysis, System Characteristics, Priority Model